Ormen Lange Gas Processing Complex and Langled

Ormen Lange is the largest gas field under development on the Norwegian continental shelf (discovered by Hydro in 1997). The field measures 359km² and is located approximately 100km off the northwest coast of Norway at a depth of 850m to 1,100m. The field is set to come into production during October 2007.

Norway has relied upon revenue from oil sales for up to 20% of is GDP since oil was first discovered in its waters in 1971. Now there are only 50 years of oil left in these reserves and the country must look towards the provision of alternatives. Gas is one of these and there are estimates of over 100 years of reserves in the new Ormen Lange fields.

The gas will be imported from the production platforms to a processing plant at Nyhamna in Norway and then exported via a 1,200km subsea pipeline (Langled project) to Easington on the east coast of the UK, and other locations on the coast of continental Europe via a distribution centre riser located on an island called Sleipner. Norway itself will use only a little of the gas as it relies heavily on hydroelectric power schemes.

The partners in the Ormen Lange project are: Norsk Hydro (18%), Shell (17%), Petoro (36%), Statoil (11%), British Petroleum (10.5%), Exxon Mobil (7%) and Conoco Philips (1%). The investment in the construction of the gas processing complex at Nyhamna is estimated at NOK4.3 billion, while the development of the gas field and the construction of the pipeline transport system is likely to cost over NOK66 billion. The project received final approval from the Norwegian parliament in April 2004 and is now underway with completion expected in 2007.

ORMEN LANGE FIELD AND TRANSPORTATION TO GAS PROCESSING

The Ormen Lange field will initially consist of six subsea wells drilled from a mobile drilling rig starting in 2005 (the number of wells will increase to over 24 according to the development plan). The wells are to be drilled by Shell Exploration; the gas is at a depth of 2,800m below the sea surface in 50m-thick layers of gas-bearing sand.

The wells will be connected by two seabed templates (subsea installation), at a depth of 800m to 1,100m, which will be attached to two 30in multi-phase pipes that will transport the gas, condensate and water stream onshore for processing – a distance of 120km.

Since the temperature of the ocean in this region can be as low as -1°C the pipes are prone to freezing with brash ice (gas water hydrate complexes). The wellheads will be able to pump monoethylene glycol as antifreeze under these conditions. The antifreeze will then be separated out by the processing plant and recycled.

GAS PROCESSING COMPLEX

The processing plant will be located at Nyhamna in Aukra municipality in Møre og Romsdal, Norway. The unprocessed well stream will first pass to a reception facility (slug catcher) to remove liquid condensate slugs that might damage other areas of the processing facility. The slug catcher will separate the gas, liquid condensate, water and antifreeze. The gas will then pass to a gas dew pointing unit prior to being compressed for export. The water is cleaned and discharged to the sea.

The condensate (6,000m³ to 8,500m³ per day) will be stabilised and stored in a 150,000m³ underground storage facility prior to export by tanker. The antifreeze is recycled to the wellhead. Over 2,500 people will be employed on-site during development of the gas complex. The gas processing complex is scheduled to be mechanically complete by February 2007.

LANGLED PIPELINE

At peak production the Orman Lange gas processing complex will handle 20 billion m³ per year. The transportation will be carried out via the world’s longest subsea export pipeline, 1,200km from Nyhamna via Sleipner in the North Sea to Easington in the UK.

The northern section, from Nyhamna to Sleipner, will be constructed of 42in-diameter steel pipeline, while the southern section to Easington will be constructed of 44in-diameter steel pipeline. The Sleipner junction will function as a distribution station and quality control centre and will also distribute gas via additional further branches to continental Europe.

The receiving terminal at Easington will distribute the gas in the UK to fulfil supply contracts with industrial (power generation) and domestic distributors. The pipeline is to be trenched in areas where the water depth is less than 60m to aid its stability. The landfall pipeline in the UK and the 525km section to Slaipen will be installed in 2005 and the Langeled North section in 2006. Hyperbaric welds will be used to join the sections as well as the expansion spools at Slaipen. A riser platform at Slaipen will enable pipelines to tie in to supply continental Europe and allow flexibility in routing the gas supply. This will also allow the north and south section of the pipeline to operate independently if required.

OFFSHORE CONTRACTS

The offshore contracts have been awarded as follows: engineering for the import pipeline to Nyhamna was awarded to Reinertsen Engineering AS; the export pipeline engineering contract was awarded to Snamprogetti; the Sleipner tie-in contract was awarded to ABB Offshore Systems; pipeline coating is to be carried out by Bredero Shaw Norway; provision of the line pipe is from Europipe GMBH and Mitsui & Co Norway. The shallow water marine installations contractor will be Stolt Offshore AS and Allseas Marine Contractors SA; the subsea production systems will be constructed by FMC Kongsberg Subsea AS and subsea rock installation by Van Oord ACZ AS. Service pipelines will be constructed by Tenaris Global Services.

The Langeled pipeline will need many companies to carry out contracts for heavy lifting transportation, subsea dredging and surveying. These companies include Heerema for heavy lifting; Nexans for dredging; Geoconsult for marine surveying; line pipe transportation by NorSea Group, Olympic Shipping, District Offshore, Solstad Shipping and Havila Shipping. The monoethyleneglycol (MEG) installation and pipelines will be installed by Stolt Offshore. Installation and tie in deep water will be carried out by Saipem. Umbilicals will be provide by Nexans and installed by Subsea 7.

ONSHORE CONTRACTS

The onshore contracts have not yet all been awarded at the current time (September 2004). Engineering, procurement, management, construction and architecture (EPMCA) for the gas complex (receiving and export) and other onshore infrastructure will be carried out by Aker Kaeverner (including the flare tower and slug catcher and emergency shutdown systems).

Civil engineering for the gas complex is the responsibility of Multiconsult and Skanska and the gas reception and export area will be constructed by Aker Kaeverner. Vetco Aibel AS will be responsible for engineering, procurement and construction (EPC) of a jetty for the export of condensate and the volatile organic compound (VOC) installation for the recovery of hydrocarbon gases; they will also construct roads and infrastructure at the complex and all the mechanical installation in the condensate storage caverns. Aker Stord, a subsidiary of Aker Kaeverner, will design and install all process systems and utility systems, including civil engineering, steel structure, pipe work, HVAC, mechanical engineering, electrical installation, instrumentation installation, insulation and surface protection. Process equipment for the separation of condensate, gas and water will be constructed at Nyhamna by Midsund Bruk (this will include 16 large process tanks, each weighing 90t).

The Langeled landfall contracts at Easington have been awarded as follows: Jan de Nul NV will construct a 400m micro tunnel and onshore pipeline installation from the beach to the terminal area. Smet Tunnelling will carryout the tunnelling work as a subcontract from Jan de Nul NV.